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Marshall Plan
Marshall Plan, formally European Recovery
Program, (April 1948–December 1951), U.S.-
sponsored program designed to rehabilitate the
economies of 17 western and southern European
countries in order to create stable conditions in which
George C. Marshall democratic institutions could survive.

The United States feared that the poverty, unemployment, and dislocation of the post-
World War II period were reinforcing the appeal of communist parties to voters in western
Europe. On June 5, 1947, in an address at Harvard University, Secretary of State George C.
Marshall advanced the idea of a European self-help program to be financed by the United
States, saying

The truth of the matter is that Europe’s requirements for the next three or four years of foreign
food and other essential products—principally from America—are so much greater than her
present ability to pay that she must have substantial additional help or face economic, social,
and political deterioration of a very grave character.

On the basis of a unified plan for western European economic reconstruction presented by
a committee representing 16 countries, the U.S. Congress authorized the establishment of
the European Recovery Program, which was signed into law by U.S. Pres. Harry S. Truman
on April 3, 1948. Aid was originally offered to almost all the European countries, including
those under military occupation by the Soviet Union. The Soviets early on withdrew from
participation in the plan, however, and were soon followed by the other eastern European
nations under their influence. This left the following countries to participate in the plan:
Austria, Belgium, Denmark, France, Greece, Iceland, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, the United Kingdom, and
western Germany.

Under Paul G. Hoffman, the Economic Cooperation Administration (ECA), a specially

created bureau, distributed over the next four years some $13 billion worth of economic
aid, helping to restore industrial and agricultural production, establish financial stability,
and expand trade. Direct grants accounted for the vast majority of the aid, with the
remainder in the form of loans. To coordinate the European participation, 16 countries, led
by the United Kingdom and France, established the Committee of European Economic
Cooperation to suggest a four-year recovery program. This organization was later replaced
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6/22/23, 9:32 AM Marshall Plan -- Britannica Online Encyclopedia

by the permanent Organisation for European Economic Co-operation (OEEC), to which

West Germany was ultimately admitted.

The Marshall Plan was very successful. The western European countries involved
experienced a rise in their gross national products of 15 to 25 percent during this period.
The plan contributed greatly to the rapid renewal of the western European chemical,
engineering, and steel industries. Truman extended the Marshall Plan to less-developed
countries throughout the world under the Point Four Program, initiated in 1949.
The Editors of Encyclopaedia BritannicaThis article was most recently revised and updated by Jeff
Wallenfeldt.

Citation Information
Article Title: Marshall Plan
Website Name: Encyclopaedia Britannica
Publisher: Encyclopaedia Britannica, Inc.
Date Published: 21 June 2023
URL: https://www.britannica.comhttps://www.britannica.com/event/Marshall-Plan
Access Date: June 22, 2023

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